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Yes, and no

Proposition 25 would help ease the budget gridlock and deserves passage. Proposition 26's attack on business fees is wrong; it should be defeated.

September 30, 2010

In 2008, the state budget was approved almost three months after its due date. Last year, a failure by lawmakers to reach a budget deal until it was two months overdue prompted ratings agencies to lower California's credit rating nearly to junk status, and the delay not only held up state payments but cost billions of dollars in interest on government IOUs. This year, Sacramento has set a dubious record for the latest budget ever. If you think this system is working, Proposition 25 is not for you. But you'll love Proposition 26, because it would make the situation worse.

Under current law, a two-thirds majority vote in both the Assembly and the Senate are required to pass a budget or raise taxes. Proposition 25 would end the supermajority requirement on the budget, but keep it in place for tax hikes. (Opponents of the measure falsely claim that it would do away with the two-thirds rule on taxes too, but their absurd legal arguments were demolished by the 3rd District Court of Appeal.) Proposition 26, by contrast, would add a new requirement for a two-thirds vote to impose certain business fees.

The current two-thirds vote requirement causes budget gridlock in Sacramento because unless the majority party holds two-thirds of the seats, it must win votes from the minority — which is extremely difficult to do in partisan times like these. The requirement also shields both parties from responsibility when the budget is late. Democrats, who currently hold the majority in both houses, can deflect blame by pointing to Republican obstructionism; Republicans have little incentive to compromise because they assume the public will blame the majority party. Conservatives fear that Proposition 25 would cause spending to soar because Democrats would control the purse strings, but there's a remedy for that. No longer able to hide behind Republicans, Democrats would have to answer to the voters for their budgets, and unhappy voters could replace them with Republicans or more fiscally conservative Democrats. A majority vote works just fine in the 47 states that use it for budget approval, and it would go a long way toward fixing California's broken budgeting process.

The best argument against Proposition 25 is that it would remove any incentive Democrats have to make a more comprehensive deal on reforming the budget process, because their majority control of the Legislature means they'd no longer need Republican help to pass a budget. It's true that simply doing away with the two-thirds mandate won't solve all the problems, and that some measures favored by Republicans, such as a rainy-day fund and spending caps, could help keep the state fiscally stable. Yet years of dysfunction have failed to prompt the two sides to make any such deal. We'd like to see a more inclusive budget package too, but that's not on the ballot this fall. Incremental change is better than none at all.

Proposition 26 targets regulatory fees, which are often imposed on businesses to make up for the social costs of their operations — such as a levy on beverage containers to pay for recycling programs. If the measure is approved, it would take a two-thirds vote for state legislators to approve or raise such a fee; municipal governments would have to submit them to a public vote, with a two-thirds supermajority required for passage.

Proponents argue that politicians often disguise taxes as fees to get past the two-thirds mandate on raising taxes, a gimmick that would be ended by Proposition 26. They have a point, but Proposition 26 goes much too far, making it extremely difficult to charge businesses for the damage they cause and instead sending the bill to everybody else. As one example, city residents would probably end up paying for public safety services at large events because municipal governments would have trouble imposing fees on promoters. Moreover, the initiative would be certain to worsen Sacramento's gridlock at budget time.

Supermajority budgeting rules served a purpose in a less partisan age, but now they have all but brought state government to a standstill. Vote yes on Proposition 25, and no on 26.

The Times' endorsements in the Nov. 2 election are collected upon publication at latimes.com/opinion.

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